Chancellor told to tackle energy costs for firms
CHANCELLOR George Osborne should address the damaging cost of energy for manufacturers and the UK’s dire productivity situation in his upcoming budget, business groups urged this morning.
“Rising energy costs represent a major threat to growth and could damage efforts to support and sustain long term recovery,” said Terry Scuoler, chief executive of manufacturers group EEF.
The industry body wants the carbon price floor to be frozen and reduced, claiming that such charges make up 10 per cent of a large industrial user’s electricity bill.
EEF is also asking the chancellor to protect the sector from the obligation to increase its reliance on renewable sources, and from small-scale feed in tariffs, which it says are adding 15 per cent to the energy bill of an average UK steel firm.
The International Energy Agency recently suggested that high costs are likely to damage energy-intensive industries in Europe, in contrast to the US where natural gas prices have been driven down considerably.
“The deepest recession for decades has exposed critical underlying issues in our competitiveness and utilisation of skills,” said Peter Cheese, chief executive of the Chartered Institute of Personnel and Development (CIPD).
“It’s important that government, key policy makers and businesses come together to work on improving the UK’s productivity, where poor relative performance predates this financial crisis.”
The human resources body is pushing for a focus on productivity in the budget, citing the recent decline in real wages.
Recent figures from the Office for National Statistics (ONS) also suggested that the international gap in output per hour worked placed the UK 21 per cent below the typical level for other G7 economies, the widest gap since 1992.